Renewing a License
Along with the renewal form and payment, documents required for license renewal include:
- Any unfiled MSA documents Non-Participating Manufacturer Brands Reporting Form, DR 1285, or Annual Exemption from Monthly Non-Participating Manufacturer Brands Reporting Form, DR 1286 (see Forms in Number Order).
- Any unfiled tax returns.
- Payment of outstanding tax debt(s) due to the Department.
- A valid sales tax license.
- PACT Act reporting, if required, must be current.
Filing a Return & Reporting Requirements
Colorado tobacco products distributors must file a Tobacco Products Tax Return electronically each quarter. The return must be filed and the payment, which is required to be made electronically, must be submitted by the 20th day of the month following the reporting quarter. If the 20th falls on a Saturday, Sunday, or legal holiday, the distributor's return and tax payment is due the next business day. EFT payments are required to be made prior to 4:00 PM Mountain Time on the return's due date.
The amount paid to the department may be reduced, based on the table below, for the tax due to cover the distributor's expense in the collection and remittance of the tax if the payment is submitted by the due date. The discount rate for non-modified risk moist snuff varies depending on whether the minimum moist snuff tax applies. For additional information on moist snuff discount rates, see the Moist Snuff web page.
No Excise Tax to Report
Distributors must file a return even if no tax is due for that quarter. Tobacco products tax returns must be submitted by the due date of the return. A tobacco products tax return not submitted to the Department is subject to a penalty of $25.00. A zero activity filing or payment by EFT does not change the requirement that a return must be submitted for each period. Missing tobacco products tax returns will delay the renewal of a tobacco products license.
Tobacco products distributors are also required to file Master Settlement Agreement (MSA) reports monthly or annually. For more information on MSA reporting, see the Master Settlement Agreement Reporting web page.
In addition, distributors who sell roll-your-own and smokeless tobacco into Colorado, are required to file PACT Act registration and submit PACT Act reports by the 10th of each month. For more information on PACT Act reporting, see the PACT Act Requirements web page.
For additional information on filing, see the File & Pay | Cigarette, Nicotine Products, & Tobacco Products web page.
For questions on filing requirements, contact the Excise Tax Unit.
Exemption and Credits
Exempt sales (line 2), credits for tobacco products exported to out-of-state retailers (line 6), credits for tobacco products exported to out-of-state consumers (line 7), credits for tobacco products returned to the manufacturer (line 8) and credits for tobacco products destroyed (line 9) must be claimed based on the manufacturer's list price, not the sales price.
If you are eligible for a credit but did not claim it on your returns, you can file amended returns to correct your filings. After amending your return, submit a Claim for Refund, DR 0137, through your Revenue Online account or see the Forms in Number Order page for the paper form to request a refund.
Tobacco product distributors are required to keep true and accurate records of their activities for at least three years after filing their Tobacco Products Tax Returns. For Master Settlement Agreement (MSA) reporting, distributors must keep their records for at least five years.
PACT Act Requirements
Federal law under the PACT Act states that distributors selling cigarettes, electronic nicotine delivery systems (ENDS) or tobacco products in interstate commerce, into Colorado are subject to a number of registration, labeling, delivery, tax, reporting and record-keeping requirements including registering and reporting under the PACT Act. For more information, visit the PACT Act Requirements web page.
Roll-Your-Own Cigarette Making Machine
Due to the passage of the 2012 federal highway bill (MAP-21), any person who makes available to consumers a machine capable of making tobacco products such as cigarettes is considered a manufacturer on the federal level and must be licensed by the Tobacco and Trade Bureau. Once federal requirements have been met, the owner must certify the product through the Colorado Attorney General's Office. Refund Credits are allowed for tax paid on tobacco products (claim on the Tobacco Products Tax Return) when:
- Shipped to retailers outside of Colorado for sale by those retailers
- Shipped to consumers outside Colorado
- Returned to the manufacturer
- Destroyed by the distributor
In addition, the department gives credit for taxes paid on tobacco products that are bad debts. The credit is prohibited unless the bad debt has been charged off as uncollectible on the books of the wholesaler. The wholesaler is required to repay the credit if payment is received for the bad debt subsequent to receiving the credit. A distributor must amend their Tobacco Products Tax Return for the period where the bad debt occurred, and claim a refund by submitting form DR 0137 through your Revenue Online account or see Forms in Number Order for the paper form.
Overpayment on tax from prior periods requires an amended tobacco products tax return and form DR 0137 (submit through your Revenue Online account or see Forms in Number Order for the paper form) to be submitted with supporting documentation.
For information on how to claim a refund, visit the File the Sellers Claim for Refund web page.
For more information regarding cigarette taxes, see the Colorado Tobacco Products Tax Guide Publication.
Modified Risk Tobacco Products
A modified risk tobacco product (MRTP) is a cigarette, tobacco product or nicotine product that has been approved by the U.S. Department of Health and Human Services Food and Drug Administration (FDA) as a MRTP. A complete list of modified risk granted orders can be found on the FDA's website. MRTPs are taxed at a lower rate than other cigarettes and tobacco products. For more information on current tax rates, including Modified Risk tax rates, see the Colorado Tobacco Products Tax Guide Publication.